Abuse of a corporate credit card: grounds for summary dismissal?

Among the basic obligations of employees vis-a-vis their employer is the obligation to behave such that their conduct in connection with the employment relationship causes no damage to the employer, to manage the tools and aids entrusted to them with proper care and diligence, and to protect the employer’s property from damage, loss, destruction, and abuse. Where an employee violates these duties by engaging in a deliberate attack against the employer’s property, the employer’s trust in them will be fundamentally disturbed or even be lost altogether. Having said that, is it really permitted to summarily dismiss an employee on these grounds, even if the damage to the employer’s property is relatively marginal?

The Supreme Court recently (i.e., in case No. 21 Cdo 3034/2016) looked into the issue of whether an attack aimed against the employer’s property justifies summary dismissal from employment even in those cases in which the damage to the employer’s property is relatively marginal, whereas the case was based on the following observations of fact:

An employee in the position of office manager had been given a corporate credit card to cover sundry expenses in connection with the discharge of their work duties. The employee then used the card to pay an amount of CZK 3 117 for food and drinks at the farewell party of another employee – a party which had been attended also by a third person who was in no relationship with the employer. When the employer found out, it promptly dismissed the employee, effective immediately, on grounds of the attack against its property which it perceived as inherent in the employee’s actions (i.e., payment of the bill for a guest who was in no relationship with the employer whatsoever, by using a credit card which the employer had made available to them strictly for the purpose of covering day-to-day expenses in connection with their work performance for the employer.

The lower-instance courts found that the dismissal had been null and void, pointing out that the instructions for use of the card had been given only orally and had been ambiguous and overall very limited, so that the employee was justified in assuming that they would be allowed to cover the costs of a team event, further, that the employee’s infraction was strictly limited to the one-time use of the card for the benefit of a third party, and finally, that the expense was relatively minor to begin with (and that the employer never sought reimbursement of the corresponding amount from the employee to begin with).

The Supreme Court, however, arrived at a completely different conclusion. It ruled that the employee, by paying the bill also for a third party utterly unrelated to the employer, violated their obligation to properly manage the means and funds of the employer and to protect its property from damage. The amount of the damage supposedly plays no role in this respect. Irrespective of the concrete figure, the trust between the parties to the employment was violated in a fundamental way.

The Supreme Court thus ultimately ruled in favor of the summary dismissal having been legitimate and justified. However, the employer could have spared itself the hassle of years of litigation if it had paid proper attention to the drafting of suitable internal rules – i.e., in particular, an internal guideline on the use of corporate credit cards and other tools and aids belonging to the employer.

Source: Czech Supreme Court judgment 21 Cdo 3034/2016 of 25 January 2017

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